The government has halved the minimum pension drawdown requirements for the 2019-2020 and 2020-2021 financial years. The reduced pension drawdown requirements are aimed at helping preserve the capital in an individual’s pension account.
This halving of the minimum pension annual drawdown requirement applies to individuals with account based pensions, allocated pensions or market linked pensions for the financial years ending 30 June 2020 and 30 June 2021. The table below sets out the reduced minimum annual pension requirements;
|
Age of pension member on 1 July or start of pension if first year |
Standard pension drawdown percentage | Reduced minimum pension percentage for 2019-20 and 2020-21 |
|
Under age 65 |
4.00% |
2.00% |
|
65 – 74 |
5.00% |
2.50% |
|
75 – 79 |
6.00% |
3.00% |
|
80 – 84 |
7.00% |
3.50% |
|
85 – 89 |
9.00% |
4.50% |
|
90 – 94 |
11.00% |
5.50% |
| Age 95 + | 14.00% |
7.00% |
Please note, there is no mandatory requirement to reduce your pension payments and this reduction is purely an option that is available to you. If you want to reduce your pension for the year ended 30 June 2020 then you should advise your fund accordingly.
If for this financial year (30 June 2020) you have already met your minimum pension drawdown requirement based on the “Reduced Minimum Pension Percentage” you can choose not to receive any further pension payments for the remainder of this financial year.
If you have already received pension payments for this financial year (30 June 2020) that are in excess of the “Reduced Minimum Pension Percentage” annual drawdown requirement then you cannot return the excess amount back to the fund unless you are eligible to re-contribute the amount within your current contribution caps.
If you are wanting to re-contribute any excess pension payments that you have received this financial year (30 June 2020) back into your super fund then please contact us and we can assist with what your concessional (tax deductible) and non-concessional (tax free) contribution caps are and what is available (ie unused) that can be utilised up and until 30 June 2020.
